China to offer neighbours $25bn stimulus

China plans to offer $25bn ($17bn) in economic relief to neighbouring countries, as it seeks to cement its position of leadership in the region and drag it from recession.

By Richard Blackden

8:17PM BST 12 Apr 2009

China plans to offer $25bn ($17bn) in economic relief to neighbouring countries, as it seeks to cement its position of leadership in the region and drag it from recession.

The two-pronged plan will see China create a $10bn investment fund as well as deliver $15bn in loans over the next three to five years, the country's foreign ministry said yesterday.

China is one of the world's only major economies still on course for expansion this year despite the recession afflicting most Western countries and an increasing number of the export-led economies in Asia. The $10bn fund will be focused on developing infrastructure between China and the 10 members of the Association of Southeast Asian Nations (Asean).

"Asean leaders hope China could play an important role in pushing forward co-operation in East Asia, and with other countries overcome the difficult times," Yang Jiechi, China's foreign minister said. China's decision to step up assistance to its neighbours comes as more evidence emerges that the 4 trillion yuan stimulus package for its own economy is gaining traction.

The country saw its industrial production climb 8.3pc in March, while a measure of the amount of money in the economy soared 25.5pc as banks sought to meet new lending targets.